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Management Discussion and Analysis

Overview of the Economy and Banking Industry

Thai Economy in 2017

In 2017, Thailand’s real GDP grew by 3.9 percent, up from 3.3 percent in 2016 on the

back of rising exports and a robust tourism sector, consistent with a stronger recovery in global

demand. Headline inflation rose to 0.7 percent, following higher energy prices, while core

inflation, which excludes energy and food prices, increased by 0.6 percent due, in part, to a

sluggish recovery in consumer demand. Other contributing factors were more structural, such as

the rise of e-commerce and growing global supply chains, both of which limited the pricing power

of domestic firms. As a result, Thailand’s nominal GDP increased by 6.3 percent, leveling at Baht

15.5 trillion (approximately US $455 billion).

The value of Thailand’s exports in 2017 surged by 9.7 percent, the highest growth rate in

six years, to US $235 billion, expanding every quarter for all key export destinations and almost

all product segments. This was, to some degree, a result of a firmer economic recovery in

Thailand’s major trading partners. In addition, a better-than-expected performance by the global

manufacturing sector and the ongoing adoption of the Internet of Things (IoT) led to a stronger

demand for products in key industrial sectors, particularly in electronics and electrical appliances.

For the past six years, tourism has continued to expand briskly. In 2017 alone, Thailand received

approximately 35 million foreign visitors, generating Baht 1.82 trillion (approximately US $53.6

billion) of income, an 11.7 percent increase from 2016. The main driver of tourism income was

spending by Chinese tourists.

Meanwhile, global financial markets experienced occasional volatility amid uncertainties

on various fronts. These include domestic and international conflicts, the UK’s exit from the EU,

and changing US government policies. These events were accompanied by the depreciation of the

US dollar since the beginning of 2017. Furthermore, despite three policy interest rate increases in

2017, to 1.25-1.50 percent, global interest rates remained low, contributing to a “search for yield”

and resulting in capital inflows to the bond and equity markets in emerging markets, including

Thailand. Consequently, in 2017 the Thai baht appreciated by 10 percent from 35.82 THB/USD at

the beginning of January to 32.57 THB/USD at the end of December, making the yearly average

33.94 THB/USD.

Commodity prices, including those of agricultural products, remained low despite a slight

increase from the beginning of the year, depressing farm income and the purchasing power of farm

households, which represent a majority of the population. Coupled with high levels of household

debt, these factors limited the extent of the rebound in consumer confidence and household

spending.

Throughout 2017, the Bank of Thailand maintained the policy interest rate at 1.50 percent,

concurring that economic gains had not been evenly distributed to the middle and low-income

population.

At the same time, the government launched a variety of tax and non-tax measures to boost

household spending, particularly near the end of the year. The government also continued to

implement infrastructure development projects, awarding contracts to winning bids for seven

projects with a value of more than Baht 385 billion, while beginning the construction phases for

eight projects with a total value of Baht 171 billion. In addition, the government pushed forward its

policies to help the grass roots, such as the “Public-Private Collaboration” scheme, as well as

policies to support Thailand’s long term competitiveness, including the Eastern Economic Corridor

(EEC) project – which aims to promote Thailand as one of the region’s logistics hubs and support

the development of high-value-added industries – and the modernization of the country’s legal

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framework to provide greater convenience for doing business. Around mid-2017, the National

Reform Committee was established to help set a new platform for Thailand’s future economic and

social development.

Economic Outlook for 2018

In 2018, the Thai economy is forecast to grow by 4.0-4.5 percent on the back of strong

exports and tourism as well as the acceleration in public and private investment. Exports and

tourism are expected to remain robust given the continuing recovery of major trading partners

including the US, Europe, and China, whose rate of economic growth, while lower than in

previous years, is now expected to exceed previous forecasts. At the same time, the pace of public

investment is set to pick up in the next two years. Government capital expenditure in the 2018

fiscal year increased by 15 percent from the 2017 fiscal year to Baht 622 billion (approximately

US $18.3 billion) while the value of scheduled infrastructure investment in the 2018 fiscal year

(under the Transport Ministry’s 2016-2018 action plans) amounted to Baht 150 billion. The

progress of the government’s infrastructure investment will help support confidence and therefore

encourage investment in the private sector. However, the sluggish improvement in agricultural and

non-agricultural income as well as high household debt means that it will take more time for

consumption to recover.

The Thai economy will continue to face external challenges, which pose risks to the

global recovery and therefore Thai exports. These include uncertainties in US economic and trade

policies, Europe’s ongoing regional political problems, and China’s economic restructuring. In

addition, the increase in the federal funds rate and the normalization of the Federal Reserve’s

balance sheet, the impact of which will be more evident this year, will likely contribute to

occasional volatility in capital flows, prompting businesses to manage their exchange rate and

interest rate risks more vigilantly.

Thailand’s long-term economic policies are geared towards strengthening its local

economies and developing high-value-added industries to reduce its reliance in exports on

commodities and traditional products. Such policies include the ongoing development of 10 target

industries: food for the future, next-generation automotive, smart electronics, medical and

wellness tourism, agriculture and biotechnology, robotics, aviation and logistics, biofuels and

biochemical, digital, and medical hubs. The promotion of these industries comes with investment

incentives, such as tax privileges for investment in research and development. Concurrently, the

country’s long-term direction will emphasize regional cooperation, both within ASEAN,

especially within the CLMV, and among other countries interested in investing in the region, such

as Japan and China.

Overall, the Thai economy is heading towards a recovery path in line with that of the

global economy, albeit with some risks. Nevertheless, strengthening the domestic economy

requires a long-term strategy to solve the country’s structural problems and promote a more even

distribution of economic prosperity to the majority of the population.

Thai Banking Industry in 2017

In 2017, commercial banks in Thailand maintained their good performance with adequate

capital to support their business operations. The combined net profit of the commercial banking

system was Baht 187.3 billion, a 5.7 percent decrease from last year, due to larger loan impairment

charges set aside for credit losses in compliance with IFRS9, which will be effective in 2019.

At the end of 2017, loans in the commercial banking system were 4.4 percent higher than

at the end of 2016, in line with the increase in SME and consumer loans, which expanded by 5.7

percent and 6.1 percent, respectively. Corporate lending was flat. SME loans grew due to

increases in lending to a range of businesses in the commercial and real estate sectors, and from

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the recovery of mid-end and high-end segments. Corporates raised funds more from issuances of

stocks and bonds than from loans. Consumer loans expanded from auto hire-purchase and

personal loans, while growth in home loans and credit card loans slowed.

Deposits grew by 5.0 percent from the end of 2016, resulting in increased liquidity as

seen in the ratio of loans to deposits, which fell from 96.9 percent at the end of 2016 to 96.3

percent. The Liquidity Coverage Ratio (LCR) stood at 180.0 percent. For liquidity management,

commercial banks are placing great emphasis on deposit restructuring and cost management as

well as reserve requirements to comply with LCR guidelines under Basel III.

In terms of loan quality, the ratio of gross non-performing loan (NPL) to total loans stood

at 2.9 percent, up from 2.8 percent at the end of 2016, reflecting a smaller increase in loans than

last year. The level of capital reserves and loan loss reserves remained high. At the end of 2017,

the total Capital Adequacy Ratio (CAR) and Common Equity Tier 1 ratio (CET1) stood at 18.2

percent and 15.6 percent, respectively.

Commercial banks in Thailand faced many challenges during the year. Although

Thailand’s overall economic growth accelerated, the benefits of growth were not distributed

equally among sectors. Consequently, commercial banks were limited in their ability to increase

their lending. At the same time, banks offered help to customers who had suffered from the slow

economic recovery while taking care of loan quality and cost management.

Government rules and regulations caused commercial banks to adapt their business plans

and working procedures to comply with these policies, particularly the Financial Sector Master

Plan Phase III and the National e-Payment Master Plan. The latter includes PromptPay, and the

expansion of Electronic Data Capture (EDC) terminals to increase card acceptance by merchants.

Technological change and financial innovation have been the main factors contributing to

commercial banks adapting their business models, adjusting their physical branches both in terms

of number and type of service, while developing their digital banking channels. In addition, banks

have been collaborating with Financial Technology (FinTech) firms on new financial products to

meet the challenges of changing consumer behavior such as the increasing popularity of mobile

banking and asset management for appropriate returns. At the same time, banks have had to invest

in developing technology and innovation, building platforms to connect to all parts of their

ecosystems, using Cloud computing technology and Big Data Analytics to collect and analyze

information to better understand consumer behavior.

Thai Banking Industry in 2018

Clearer signs of global economic recovery will cause major central banks to gradually

pull back on their quantitative easing programs. Interest rates will rise, affecting Thailand’s

financial environment although at the same time the Thai economy is still likely to expand.

Contributing factors include the acceleration in the government’s infrastructure investment, the

recovery in private sector investment, particularly in the Eastern Economic Corridor (EEC), as

well as export growth and an increasing number of foreign tourists which will benefit tourism-

related businesses, especially in provinces that are tourist destinations.

Consequently, lending is likely to expand as well as deposits. The commercial banking

system will have to manage its liquidity to be in line with the changing environment and Bank of

Thailand requirements to comply with the Liquidity Coverage Ratio (LCR) guidelines.

Better loan management in the commercial banking system is likely to help improve loan

quality, and is expected to result in the ratio of gross NPL to total loans growing at a slower pace.

However, commercial banks will still be cautious in their lending policies. The relatively high

level of capital and increases in reserves will continue to provide a cushion for the system’s NPL.

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Factors Affecting Banking Industry Performance

The megatrends of regionalization, urbanization and digitalization will continue to shape

Thailand’s economy over the next few years. These trends are the driving factors behind the need

for the public and private sectors to establish a framework and measures to cope with changes in

the economic and financial sectors.

1. Regionalization – The trend of regionalization in Asia and economic development

within the ASEAN Economic Community (AEC) is helping expand markets. At the same time,

governments in the region have invested in regional infrastructure development which will bring

greater convenience in terms of trade, services, investment and cross-border migration, while

generating economic opportunities for their countries.

2. Establishing a new foundation for the future of Thailand – The government’s policies

to lay a long-term foundation for the country include (1) Rebalancing the economy by

strengthening the domestic sector, particularly at the local and SME levels, in order to reduce

Thailand’s reliance on exports; (2) Restructuring the productive sector by using technology and

innovation to increase the value of existing industries and developing 10 high-value-added target

industries which will serve as the new growth engine for the country; (3) Improving infrastructure,

particularly transportation routes; and (4) Upgrading the EEC development project in three

provinces in Eastern Thailand – Chonburi, Rayong and Chachoengsao – strategically located for

the ASEAN region.

3. Thailand 4.0 policy – Structural economic change promoting a value-based economy

will happen in four important areas (1) From traditional to modern agriculture with a focus on

management and technology; (2) From traditional SME to smart enterprises and start-ups with

high potential; (3) From traditional services to high-value services that provide more value

creation; and (4) From low-skilled to high-skilled labor with knowledge and expertise.

4. Digital disruptions to banking – Digital technology will impact commercial banking

businesses. Rapid growth in the use of smartphones and tablets enables consumers to increase

their everyday access to digital media, which is changing how consumers use financial services.

The changing nature of financial transactions make it more convenient and faster for consumers to

make payments, transfer and raise funds, make loans, and perform asset-management planning. In

addition, banks are benefitting from advances in IT and customer analysis using Big Data

Analytics and Artificial Intelligence (AI) to set marketing strategies suited to the behavior of each

customer group, as well as developing products and end-to-end solutions. However, the advent of

FinTech has changed the competitive environment. FinTech firms are no longer operated only by

financial institutions but also include players in other industries.

5. National e-Payment Master Plan – This initiative aims to develop a full range of e-

Payment options which will increase the efficiency of the payment infrastructure. This will

support its objectives of moving towards a cashless society while enabling financial transactions

and economic activities to be carried out more easily and quickly. E-Payments are expected to

support the business sector’s competitiveness and enhance quality of life as well as strengthening

the stability of the financial system.

6. Financial Sector Master Plan Phase III – This is a five-year development plan from

2016-2020 to enhance the Thai financial system in four areas: (1) Competitive – Thai financial

institutions are competitive in both domestic and international markets, with low operating cost

and wide range of products and services at fair prices; (2) Inclusive – Individuals, SME, and large

corporates can appropriately and widely access financial services in line with their needs; (3)

Connected – Thai financial institutions have more roles in the region and provide more cross-

border financial services to support regional trades and investments; and (4) Sustainable – The

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Thai financial institutions system is robust and able to support the country’s economic growth as

well as promoting sustainable economic well-being.

The five factors above will underpin the transformation of Thailand’s economy through a

combination of government policies and changes in private-sector business conduct, as well as

changes in consumer behavior. Therefore, Thai commercial banks must be ready for these trends

and able to cope with changes in order to move forward in a sustainable way.

Overall Picture of the Bank and its Subsidiaries

Million Baht

Item Quarter Change (%) Year Change

4/2017 3/2017 4/2016 3/2017 4/2016 2017 2016 (%)

Net profit * 8,496 8,161 8,267 4.1% 2.8% 33,009 31,815 3.8%

Earnings per share (Baht) 4.45 4.28 4.33 4.1% 2.8% 17.29 16.67 3.8%

Net interest margin 2.31% 2.30% 2.36% 0.01% (0.05)% 2.32% 2.34% (0.02)%

Net fees and service income to

operating income ratio 27.3% 23.2% 22.9% 4.1% 4.4% 24.5% 23.1% 1.4%

Expense to operating income ratio 45.5% 41.9% 47.4% 3.6% (1.9)% 43.5% 47.7% (4.2)%

Return on average assets * 1.10% 1.06% 1.13% 0.04% (0.03)% 1.09% 1.09% -

Return on average equity * 8.48% 8.33% 8.77% 0.15% (0.29)% 8.49% 8.59% (0.10)%

* Attributable to the Bank

Million Baht

Item December

2017 September

2017 December

2016

Change (%) September

2017 December

2016

Loans ** 2,003,989 1,938,619 1,941,093 3.4% 3.2%

Deposits 2,310,743 2,300,958 2,178,141 0.4% 6.1%

Loan to deposit ratio 86.7% 84.3% 89.1% 2.5% (2.4)%

Non-performing loan (NPL) 87,419 88,231 68,841 (0.9)% 27.0%

Ratio of NPL to total loans 3.9% 3.8% 3.2% 0.1% 0.7%

Ratio of loan loss reserves to NPL 160.2% 154.0% 173.6% 6.2% (13.4)%

Total capital adequacy ratio 18.17% 18.73% 18.32% (0.56)% (0.15)%

** Less deferred revenue

Bangkok Bank and its subsidiaries’ net interest income amounted to Baht 66.6 billion, an

increase of 4.1 percent from 2016, with a net interest margin of 2.32 percent. Non-interest income

was Baht 45.8 billion, an increase of 9.5 percent due predominantly to the increase in net fees and

service income and gains on investments. The increase in net fees and service income caused by

the increase in fee income from bancassurance and mutual funds, and loan-related fees. The

Bank’s operating expenses were Baht 48.9 billion, a decrease of 3.1 percent, with a ratio of

expense to operating income of 43.5 percent. Consequently, net profit attributable to the Bank for

2017 was Baht 33.0 billion, an increase of 3.8 percent from last year.

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At the end of December 2017, the Bank’s loans were Baht 2,004.0 billion, an increase of

3.2 percent from the end of 2016. The ratio of non-performing loan (NPL) to total loans was 3.9

percent, while the total allowances for doubtful accounts were Baht 140.0 billion with the ratio of

loan loss reserves to NPL at 160.2 percent. In terms of capital, the Bank of Thailand (BOT) announced the guidelines for identifying

and regulating Domestic Systemically Important Banks (D-SIBs) in September 2017. Bangkok

Bank, which is classified as a D-SIB, is required by the BOT to hold additional capital for the

Higher Loss Absorbency (HLA), which gradually increasing the required Common Equity Tier 1

capital ratio, by an increment of 0.5 percent from January 1, 2019 until completion of the

increment of 1.0 percent from January 1, 2020 onwards. For the Bank, with the inclusion of net

profit from July to December 2017, the total capital adequacy ratio, the Common Equity Tier 1

capital adequacy ratio and the Tier 1 capital adequacy ratio of the Bank and its subsidiaries would

be 18.90 percent, 17.35 percent and 17.36 percent, respectively. These capital adequacy ratios are

adequate to support the additional capital adequacy ratios specified in the guidelines on D-SIBs.

Shareholders’ equity as of December 31, 2017, amounted to Baht 401.7 billion. The book value

per share was Baht 210.45, an increase of Baht 11.90 from the end of 2016.

Operating Income and Expenses of the Bank and its Subsidiaries

Million Baht

Item Quarter Change (%) Year Change

4/2017 3/2017 4/2016 3/2017 4/2016 2017 2016 (%)

Net interest income 16,955 16,825 16,303 0.8% 4.0% 66,625 63,998 4.1%

Non-interest income 11,789 11,651 11,063 1.2% 6.6% 45,843 41,860 9.5%

Operating expenses 13,089 11,938 12,968 9.6% 0.9% 48,948 50,505 (3.1)%

Impairment loss of loans and debt securities 4,617 6,259 3,596 (26.2)% 28.4% 22,370 15,728 42.2%

Operating profit before tax 11,038 10,279 10,802 7.4% 2.2% 41,150 39,625 3.8%

Income tax expenses 2,457 2,037 2,469 20.6% (0.5)% 7,832 7,556 3.7%

Net profit 8,581 8,242 8,333 4.1% 3.0% 33,318 32,069 3.9%

Net profit * 8,496 8,161 8,267 4.1% 2.8% 33,009 31,815 3.8%

Total comprehensive income * 8,705 12,196 8,128 (28.6)% 7.1% 34,763 29,205 19.0%

* Attributable to the Bank

In terms of operating results for the fourth quarter of 2017, compared with the third quarter

of 2017, Bangkok Bank and its subsidiaries reported an increase of Baht 138 million or 1.2 percent

in non-interest income due mainly to an increase in net fees and service income, with contributions

from loan-related fees, bancassurance and mutual funds as well as fee income from underwriting

commitments, while gains on investments decreased. Net interest income rose by Baht 130 million

or 0.8 percent due to an increase in interest income from investments. This was coupled with the

decline in interest expenses on debt issued and borrowings from the early redemption of

Subordinated Debentures No. 1/2012. Impairment loss of loans and debt securities declined by

Baht 1.6 billion or 26.2 percent while operating expenses rose by Baht 1.2 billion, due

predominantly to an increase in other expenses, and premises and equipment expenses.

Consequently, net profit attributable to the Bank in the fourth quarter of 2017 amounted to Baht

8.5 billion, an increase of Baht 335 million or 4.1 percent from the third quarter of 2017.

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Compared with the fourth quarter of 2016, non-interest income rose by Baht 726 million or

6.6 percent, mainly due to increases in net fees and service income, largely due to an increase in

loan-related fees and fee income from bancassurance and mutual funds. Net interest income rose by

Baht 652 million or 4.0 percent mainly due to an increase in interest income from interbank and

money market items and loans, while interest expenses from deposits increased in line with an

increase in deposit volume. Operating expenses rose by Baht 121 million or 0.9 percent, due

predominantly to increases in personnel expenses and premises and equipment expenses, while other

expenses decreased due mainly to a decline in provisions for contingencies. Impairment loss of

loans and debt securities rose by Baht 1.0 billion. Consequently, net profit attributable to the Bank

rose by Baht 229 million or 2.8 percent from the same quarter of 2016.

Comparing 2017 to 2016, Bangkok Bank and its subsidiaries reported an increase of Baht

4.0 billion or 9.5 percent in non-interest income due predominantly to the increase in net fees and

service income, caused by the increase in fee income from bancassurance and mutual funds, loan-

related fees, and gains on investments. Net interest income rose by Baht 2.6 billion or 4.1 percent

mainly due to an increase in interest income from interbank and money market items and an

increase in interest income from loans. Operating expenses decreased by Baht 1.6 billion or 3.1

percent, due predominantly to a decrease in provisions for contingencies. Impairment loss on

loans and debt securities rose by Baht 6.6 billion or 42.2 percent. As a result, net profit attributable

to the Bank amounted to Baht 33.0 billion, an increase of Baht 1.2 billion or 3.8 percent from the

previous year.

Net Interest Income

Million Baht

Item Quarter Change (%) Year Change

4/2017 3/2017 4/2016 3/2017 4/2016 2017 2016 (%)

Interest Income

Loans 22,465 22,418 21,967 0.2% 2.3% 88,876 88,079 0.9%

Interbank and money market items 2,237 2,348 1,499 (4.7)% 49.2% 8,358 6,122 36.5%

Investments 2,158 1,987 2,055 8.6% 5.0% 8,242 8,242 -

Total interest income 26,860 26,753 25,521 0.4% 5.2% 105,476 102,443 3.0%

Interest expenses

Deposits 5,616 5,552 4,992 1.2% 12.5% 21,596 21,410 0.9%

Interbank and money market items 310 307 235 1.0% 31.9% 1,115 1,104 1.0%

Contributions to the Deposit Protection

Agency and Financial Institutions

Development Fund 2,429 2,442 2,277 (0.5)% 6.7% 9,617 9,127 5.4%

Debt issued and borrowings 1,550 1,627 1,714 (4.7)% (9.6)% 6,523 6,804 (4.1)%

Total interest expenses 9,905 9,928 9,218 (0.2)% 7.5% 38,851 38,445 1.1%

Net interest income 16,955 16,825 16,303 0.8% 4.0% 66,625 63,998 4.1%

Yield on earning assets 3.66% 3.65% 3.69% 0.01% (0.03)% 3.68% 3.74% (0.06)%

Cost of funds 1.54% 1.54% 1.52% - 0.02% 1.54% 1.59% (0.05)%

Net interest margin 2.31% 2.30% 2.36% 0.01% (0.05)% 2.32% 2.34% (0.02)%

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Net interest income in the fourth quarter of 2017 amounted to Baht 17.0 billion, an increase

of Baht 130 million or 0.8 percent from the third quarter of 2017, due to an increase of Baht 107

million or 0.4 percent in interest income, mainly from an increase of Baht 171 million or 8.6 percent in

interest income from investments, due largely to an increase in investment volume. Interest income

from interbank and money market items declined by Baht 111 million or 4.7 percent from a decline in

transaction volume. Interest expenses declined by Baht 23 million or 0.2 percent, due mainly to a

decrease of Baht 77 million in interest expenses on debt issued and borrowings from the early

redemption of Subordinated Debentures No. 1/2012 in December 2017. Interest expenses from

deposits rose by Baht 64 million or 1.2 percent. The net interest margin rose by 0.01 percent from the

previous quarter to 2.31 percent as a result of higher yield on earning assets.

Compared with the fourth quarter of 2016, net interest income rose by Baht 652 million or

4.0 percent, due to an increase of Baht 1.3 billion or 5.2 percent in interest income. Significant items

included an increase of Baht 738 million or 49.2 percent in interest income from interbank and

money market items due to an increase in transaction volume, and an increase of Baht 498 million or

2.3 percent in interest income from loans due to an increase in lending volume. Interest expenses

rose by Baht 687 million or 7.5 percent, mainly from an increase of Baht 624 million or 12.5 percent

in interest expenses on deposits due to an increase in deposit volume. As a result, contributions to the

Deposit Protection Agency and Financial Institutions Development Fund also increased. The net

interest margin decreased by 0.05 percent from the same quarter last year.

In 2017, net interest income amounted to Baht 66.6 billion, an increase of Baht 2.6 billion

or 4.1 percent from 2016, due predominantly to an increase of Baht 2.2 billion or 36.5 percent in

interest income from interbank and money market items, and an increase of Baht 797 million or 0.9

percent in interest income on loans due to the expansion in loan volume. Interest expenses rose by

Baht 406 million or 1.1 percent mainly due to an increase in interest expenses on deposits and

contributions to the Deposit Protection Agency and Financial Institutions Development Fund in line

with an increase in deposit volume. The net interest margin decreased by 0.02 percent from last year

to 2.32 percent as a result of lower yield on earning assets.

Bangkok Bank Interest Rates May 16, ’17 Apr 25, ’16 Apr 6, ’16 May 26, ’15

Loans (%)

MOR 7.125 7.375 7.375 7.375

MRR 7.125 7.625 7.875 7.875

MLR 6.250 6.250 6.250 6.500

Deposits (%)

Savings 0.500-0.625 0.500-0.625 0.500-0.625 0.500-0.625

Fixed 3 months 1.000 1.000 1.000 1.000

Fixed 6 months 1.250 1.250 1.250 1.250

Fixed 12 months 1.500 1.500 1.500 1.500

Apr 29, ’15 Mar 11, ’15

Bank of Thailand Policy Rates (%) 1.500 1.750

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Non-Interest Income Million Baht

Item Quarter Change (%) Year Change

4/2017 3/2017 4/2016 3/2017 4/2016 2017 2016 (%)

Fees and service income 10,121 8,807 8,478 14.9% 19.4% 36,460 32,936 10.7%

Less Fees and service expenses 2,285 2,208 2,223 3.5% 2.8% 8,934 8,444 5.8%

Net fees and service income 7,836 6,599 6,255 18.7% 25.3% 27,526 24,492 12.4%

Gains on tradings and foreign

exchange transactions 1,736 1,492 2,026 16.4% (14.3)% 6,257 7,459 (16.1)%

Gains on investments 965 2,502 1,222 (61.4)% (21.0)% 6,428 4,272 50.5%

Share of profit from investment using

equity method 16 52 41 (69.2)% (61.0)% 205 97 111.3%

Gains on disposal of assets 209 198 542 5.6% (61.4)% 1,196 999 19.7%

Dividend income 892 711 784 25.5% 13.8% 3,788 3,966 (4.5)%

Other operating income 135 97 193 39.2% (30.1)% 443 575 (23.0)%

Total other operating income 3,953 5,052 4,808 (21.8)% (17.8)% 18,317 17,368 5.5%

Total non-interest income 11,789 11,651 11,063 1.2% 6.6% 45,843 41,860 9.5%

Net fees and service income to

operating income ratio 27.3% 23.2% 22.9% 4.1% 4.4% 24.5% 23.1% 1.4%

Non-interest income in the fourth quarter of 2017 amounted to Baht 11.8 billion, an

increase of Baht 138 million or 1.2 percent from the third quarter of 2017, mainly due to an increase

of Baht 1.2 billion in net fees and service income, due to an increase in fee income from loan-related

services, bancassurance and mutual funds, and underwriting commitments. Gains on tradings and

foreign exchange transactions increased by Baht 244 million and dividend income increased by Baht

181 million, while gains on investments decreased by Baht 1.5 billion. Consequently, the ratio of net

fees and service income to operating income stood at 27.3 percent, 4.1 percent higher than the

previous quarter.

Compared with the fourth quarter of 2016, non-interest income rose by Baht 726 million or

6.6 percent due mainly to an increase of Baht 1.6 billion in net fees and service income due to an

increase in fee income from loan-related services, and bancassurance and mutual funds. Gains on

disposal of assets decreased by Baht 333 million and gains on tradings and foreign exchange

transactions decreased by Baht 290 million.

In 2017, non-interest income amounted to Baht 45.8 billion, an increase of Baht 4.0 billion or

9.5 percent from 2016, due to an increase in net fees and service of Baht 3.0 billion, due mainly to the

increase in fee income from bancassurance and mutual funds, loan-related services, and transaction

services. Gains on investments increased by Baht 2.2 billion while gains on tradings and foreign

exchange transactions decreased by Baht 1.2 billion. Consequently, the ratio of net fees and service

income to operating income stood at 24.5 percent, compare to 23.1 percent in the previous year.

V3 22/02/61 10:09 น.

10

21.9% 19.0% 26.2%6.4% 6.6%

6.5%20.9% 20.2%

19.5%

50.8% 54.2% 47.8%

Q4'17 Q3'17 Q4'16

19.7% 23.4%6.9% 6.7%20.9% 19.6%

52.5% 50.3%

2017 2016

Operating Expenses Million Baht

Item Quarter Change (%) Year Change

4/2017 3/2017 4/2016 3/2017 4/2016 2017 2016 (%)

Personnel expenses 6,602 6,446 6,157 2.4% 7.2% 25,541 25,247 1.2%

Directors’ remuneration 46 22 43 109.1% 7.0% 148 125 18.4%

Premises and equipment expenses 2,736 2,409 2,535 13.6% 7.9% 10,252 9,909 3.5%

Taxes and duties 840 790 838 6.3% 0.2% 3,357 3,388 (0.9)%

Other expenses 2,865 2,271 3,395 26.2% (15.6)% 9,650 11,836 (18.5)%

Total operating expenses 13,089 11,938 12,968 9.6% 0.9% 48,948 50,505 (3.1)%

Expense to operating income ratio 45.5% 41.9% 47.4% 3.6% (1.9)% 43.5% 47.7% (4.2)%

Operating expenses in the fourth quarter of 2017 amounted to Baht 13.1 billion, an increase

of Baht 1.2 billion or 9.6 percent from the third quarter of 2017 due to an increase of Baht 594

million in other expenses, partly from marketing expenses and an increase of Baht 327 million in

premises and equipment expenses. Compared with the fourth quarter of 2016, operating expenses increased by Baht 121 million,

due to an increase of Baht 445 million in personnel expenses from the annual salary adjustment and an

increase of Baht 201 million in premises and equipment expenses, while other expenses decreased by

Baht 530 million mainly due to a decline in provisions for contingencies.

In 2017, operating expenses amounted to Baht 48.9 billion, a decrease of Baht 1.6 billion or

3.1 percent from 2016. Significant items included a decrease of Baht 2.2 billion in other expenses

mainly due to lower provisions for contingencies.

Impairment Loss of Loans and Debt Securities

Million Baht

Item Quarter Change (%) Year Change

4/2017 3/2017 4/2016 3/2017 4/2016 2017 2016 (%)

Bad debt and doubtful accounts 4,654 6,420 2,792 (27.5)% 66.7% 22,712 15,351 48.0%

Loss on debt restructuring (reversal) (37) (161) 804 77.0% (104.6)% (342) 377 (190.7)%

Total 4,617 6,259 3,596 (26.2)% 28.4% 22,370 15,728 42.2%

Impairment loss of loans and debt securities in the fourth quarter of 2017 was Baht 4.6

billion, compared to Baht 6.3 billion in the third quarter of 2017 and Baht 3.6 billion in the fourth

quarter of 2016. In 2017, impairment loss of loans and debt securities amounted to Baht 22.4

billion, compared to Baht 15.7 billion in the previous year.

Portion of Operating Expenses

Personnel expenses (Including directors’ remuneration)

Premises and equipment expenses

Taxes and duties

Other expenses

V3 22/02/61 10:09 น.

11

Significant Items in the Financial Position

Assets Million Baht

Item December

2017 September

2017 December

2016

Change (%) September

2017 December

2016

Net interbank and money market items 437,738 607,775 394,612 (28.0)% 10.9%

Net investments 591,720 493,908 546,614 19.8% 8.3%

Net investments in associates 1,460 1,443 1,327 1.2% 10.0%

Loans * 2,003,989 1,938,619 1,941,093 3.4% 3.2%

Net properties for sale 11,415 11,378 12,262 0.3% (6.9)%

Total assets 3,076,310 3,073,691 2,944,230 0.1% 4.5%

* Less deferred revenue

Total assets as of December 31, 2017, amounted to Baht 3,076.3 billion, an increase of Baht

2.6 billion from the end of September 2017. Significant items included net investments of Baht 591.7

billion, an increase of Baht 97.8 billion or 19.8 percent from an increase in the investment in available-

for-sale securities, and loans of Baht 2,004.0 billion, an increase of Baht 65.4 billion or 3.4 percent,

while net interbank and money market items of Baht 437.7 billion, a decrease of Baht 170.0 billion or

28.0 percent mainly from a decrease in lending.

Compared with the end of December 2016, total assets rose by Baht 132.1 billion. Significant

items included an increase of Baht 62.9 billion or 3.2 percent in loans, an increase of Baht 45.1

billion or 8.3 percent in net investments due to the investment in available-for-sale securities, and an

increase of Baht 43.1 billion or 10.9 percent in net interbank and money market items due to an

increase in lending.

Loans

Loans as of December 31, 2017 amounted to Baht 2,004.0 billion, an increase of Baht

65.4 billion or 3.4 percent from the end of September 2017 due to the increase in all customer

segments, mainly from large corporates. Compared with the end of December 2016, loans rose by

Baht 62.9 billion or 3.2 percent due to an increase in loans to large corporates, medium-sized

businesses and the consumer sector, as well as loans made through the Bank’s international network.

Million Baht

Loans by Business Type * December

2017 September

2017 December

2016

Change (%) September

2017 December

2016

Manufacturing and commercial 819,338 812,621 810,335 0.8% 1.1%

Utilities and services 421,595 422,319 399,372 (0.2)% 5.6%

Housing 228,146 225,109 219,365 1.3% 4.0%

Real estate and construction 191,176 187,971 179,973 1.7% 6.2%

Agriculture and mining 46,658 39,019 38,541 19.6% 21.1%

Others 297,076 251,580 293,507 18.1% 1.2%

Total 2,003,989 1,938,619 1,941,093 3.4% 3.2%

* Less deferred revenue

V3 22/02/61 10:09 น.

12

Portion of Loans by Business TypeManufacturing and commercialUtilities and servicesHousingReal estate and constructionAgriculture and miningOthers

14.8% 13.0% 15.1% 3% 2.0% 2.0%9.6% 9.7% 9.3%11.4% 11.6% 11.3%

21.0% 21.8% 20.6%

40.9% 41.9% 41.7%

Dec'17 Sep'17 Dec'16

Classified Loans and Allowance for Doubtful Accounts Million Baht

Item

Loans & Accrued Interest Receivables * Allowance for Doubtful Accounts

Classified to Bank of Thailand Criteria

December

2017

September

2017

December

2016

December

2017

September

2017

December

2016

Normal 1,875,782 1,806,458 1,830,827 14,983 14,547 14,502

Special mentioned 45,815 48,646 46,058 591 619 548

Substandard 11,760 11,955 9,495 5,275 5,364 2,589

Doubtful 19,012 20,487 16,050 10,387 10,766 10,140

Doubtful of loss 56,681 55,834 43,316 36,471 36,135 27,815

Total 2,009,050 1,943,380 1,945,746 67,707 67,431 55,594

Add Excess allowance for doubtful

accounts

70,004 66,047 61,214

Total allowance for doubtful accounts

from loan classification

137,711 133,478 116,808

Add Revaluation allowance for debt

restructuring

2,310 2,362 2,710

Total allowance for doubtful accounts

140,021 135,840 119,518

* Less deferred revenue

Million Baht

Item December

2017

September

2017

December

2016

Change (%)

September

2017

December

2016

NPL before allowance for doubtful accounts 87,419 88,231 68,841 (0.9)% 27.0%

Ratio of NPL to total loans 3.9% 3.8% 3.2% 0.1% 0.7%

NPL after allowance for doubtful accounts

(net NPL) 26,576 26,928 19,156 (1.3)% 38.7%

Ratio of net NPL to net total loans 1.2% 1.2% 0.9% - 0.3%

Ratio of loan loss reserves to minimum

required provisioning 200.0% 194.6% 205.0% 5.4% (5.0)%

Ratio of loan loss reserves to NPL 160.2% 154.0% 173.6% 6.2% (13.4)%

The highest portion of lending was to

various industries in the manufacturing

and commercial sectors, at 40.9 percent,

followed by 21.0 percent to utilities and

services, 11.4 percent to housing, and 9.6

percent to real estate and construction . The main increase in loans from the end of

September 2017 was to ‘others’ and

agriculture and mining, while the increase

from the end of December 2016 was

mainly to utilities and services and real

estate and construction.

V3 22/02/61 10:09 น.

13

Non-performing loan (NPL) at the end of December 2017 amounted to Baht 87.4 billion

and the ratio of NPL to total loans was 3.9 percent.

Total allowance for doubtful accounts at the end of December 2017 was Baht 140.0 billion

or 200.0 percent of the minimum amount required by the Bank of Thailand (BOT) of Baht 70.0

billion. The ratio of loan loss reserves to NPL as at the end of December 2017 was 160.2 percent.

Net Investments

Net investments as of December 31, 2017 amounted to Baht 591.7 billion, an increase of

Baht 97.8 billion or 19.8 percent from the end of September 2017, and of Baht 45.1 billion or 8.3

percent from the end of December 2016, due mainly to an increase in investment from available-

for-sale securities.

Million Baht

Investments by Investment Holding December

2017 September

2017 December

2016

Change (%) September

2017 December

2016

Trading securities 15,113 21,799 33,148 (30.7)% (54.4)%

Available-for-sale securities 533,651 424,622 462,742 25.7% 15.3%

Held-to-maturity debt securities 11,233 14,742 18,121 (23.8)% (38.0)%

General investments 31,723 32,745 32,603 (3.1)% (2.7)%

Total net investments 591,720 493,908 546,614 19.8% 8.3%

Most of the net investments were in government and state-enterprise securities. As of

December 31, 2017, these amounted to Baht 315.8 billion, accounting for 53.4 percent of total

investments. Foreign debt securities were Baht 99.4 billion, private enterprise debt securities Baht

43.5 billion, and net equity securities Baht 124.1 billion.

Million Baht

Investments by Maturity *

December 2017 September 2017 December 2016 Change (%)

Amount Portion Amount Portion Amount Portion September

2017

December

2016

Up to one year 71,982 12.1% 70,386 14.2% 87,347 15.9% 2.3% (17.6)%

Between one and five years 375,910 63.4% 286,528 57.9% 317,650 58.0% 31.2% 18.3%

Over five years 24,597 4.2% 18,020 3.6% 37,631 6.9% 36.5% (34.6)%

No maturity 120,691 20.3% 120,417 24.3% 105,313 19.2% 0.2% 14.6%

Total net investments 593,180 100.0% 495,351 100.0% 547,941 100.0% 19.7% 8.3%

* Including net investments in associates

The remaining terms of the net investments (including net investments in associates) as of

December 31, 2017 were categorized into securities with less than one year to maturity of Baht 72.0

billion, securities with one-to-five years to maturity of Baht 375.9 billion, securities with remaining

maturities of more than five years of Baht 24.6 billion, and securities with no maturity of Baht 120.7

billion.

V3 22/02/61 10:09 น.

14

Liabilities and Shareholders’ Equity Million Baht

Item December

2017 September

2017 December

2016

Change (%) September

2017 December

2016

Deposits 2,310,743 2,300,958 2,178,141 0.4% 6.1%

Interbank and money market items 133,584 133,365 130,928 0.2% 2.0%

Debt issued and borrowings 107,190 129,518 137,815 (17.2)% (22.2)%

Total liabilities 2,674,303 2,680,473 2,564,985 (0.2)% 4.3%

Shareholders’ equity * 401,724 393,019 379,016 2.2% 6.0%

* Attributable to the Bank

Total liabilities as of December 31, 2017 amounted to Baht 2,764.3 billion, a decrease of

Baht 6.2 billion or 0.2 percent from the end of September 2017, due largely to a decrease of Baht

22.3 billion or 17.2 percent in debt issued and borrowings while an increase of Baht 9.8 billion or

0.4 percent in deposits.

Compared with the end of December 2016, total liabilities rose by Baht 109.3 billion or

4.3 percent, mostly from deposits which rose by Baht 132.6 billion or 6.1 percent. Debt issued and

borrowings fell by Baht 30.6 billion or 22.2 percent.

Deposits

Million Baht

Deposits

Classified by Product Type

December 2017 September 2017 December 2016 Change (%)

Amount Portion Amount Portion Amount Portion September

2017

December

2016

Current 106,184 4.6% 96,560 4.2% 95,810 4.4% 10.0% 10.8%

Savings 1,065,928 46.1% 1,034,254 44.9% 958,150 44.0% 3.1% 11.2%

Fixed * 1,138,631 49.3% 1,170,144 50.9% 1,124,181 51.6% (2.7)% 1.3%

Total 2,310,743 100.0% 2,300,958 100.0% 2,178,141 100.0% 0.4% 6.1%

Loan to deposit ratio 86.7% 84.3%

89.1% 2.4% (2.4)%

* Including negotiable certificates of deposit

Total deposits as of December 31, 2017 amounted to Baht 2,310.7 billion, an increase of

Baht 9.8 billion or 0.4 percent from the end of September 2017, due to current deposits which rose

by 10.0 percent and savings deposits which rose by 3.1 percent caused by an increase in the

proportion of low-cost deposits, while fixed deposits which fell by 2.7 percent. Compared with the end of December 2016, total deposits rose by Baht 132.6 billion or

6.1 percent from all types of deposits; savings deposits rose by 11.2 percent, current deposits rose

by 10.8 percent and fixed deposits rose by 1.3 percent due to the cost management of deposits by

increasing the proportion of low-cost deposits.

V3 22/02/61 10:09 น.

15

Debt Issued and Borrowings Million Baht

Debt Issued and Borrowings

Classified by Type of Instruments

December 2017 September 2017 December 2016 Change (%)

Amount Portion Amount Portion Amount Portion September

2017

December

2016

Senior unsecured notes 98,003 86.6% 100,105 73.9% 107,556 74.7% (2.1)% (8.9)%

Unsecured subordinated notes 14,692 13.0% 35,007 25.8% 36,123 25.1% (58.0)% (59.3)%

Bills of exchange 26 0.1% 36 0.1% 74 0.1% (27.8)% (64.9)%

Others 384 0.3% 346 0.2% 213 0.1% 11.0% 80.3%

Total (before less discount on

borrowings) 113,105 100.0% 135,494 100.0% 143,966 100.0% (16.5)% (21.4)%

Less Discount on borrowings 5,915 5,976 6,151

(1.0)% (3.8)%

Total 107,190 129,518 137,815

(17.2)% (22.2)%

Total debt issued and borrowings as of December 31, 2017 amounted to Baht 107.2 billion,

a decrease of Baht 22.3 billion from the end of September 2017 and a decrease of Baht 30.6

billion from the end of December 2016. The declines were due mainly to the early redemption of

Baht 20.0 billion of Subordinated Debentures No. 1/2012 on December 7, 2017 and to a decrease

in the value of foreign-denominated debentures as a result of the Baht’s appreciation.

Shareholders’ Equity

Shareholders’ equity attributable to the Bank as of December 31, 2017 amounted to Baht

401.7 billion, an increase of Baht 22.7 billion or 6.0 percent from the end of 2016, due mainly to

the net profit attributable to the Bank for 2017 of Baht 33.0 billion, net of two dividend payments

in 2017 totaling Baht 12.1 billion which consisted of the final dividend payment for 2016

performance of Baht 8.3 billion (Baht 4.50 per share) following the resolution of the shareholders’

meeting dated April 12, 2017, and the interim dividend payment made from the net profit from

operations for the first half of 2017 (January to June) of Baht 3.7 billion (Baht 2.00 per share), and

due to an increase of Baht 7.0 billion in revaluation gains on available-for-sale investments. Loss

on translation of the financial statements of foreign operations rose by Baht 5.0 billion due to the

Baht’s appreciation.

Contingent Liabilities

Million Baht

Item December

2017 September

2017 December

2016

Change (%) September

2017 December

2016

Avals to bills 8,187 7,424 5,529 10.3% 48.1%

Guarantees of loans 20,445 20,192 18,001 1.3% 13.6%

Liability under unmatured import bills 16,394 14,597 17,921 12.3% (8.5)%

Letters of credit 31,803 33,009 35,623 (3.7)% (10.7)%

Other commitments

Underwriting commitments 1,098 3,820 - (71.3)% 100.0%

Amount of unused bank overdrafts 174,083 176,188 175,893 (1.2)% (1.0)%

Other guarantees 259,314 263,485 267,989 (1.6)% (3.2)%

Others 88,622 97,230 82,088 (8.9)% 8.0%

Total 599,946 615,945 603,044 (2.6)% (0.5)%

V3 22/02/61 10:09 น.

16

Contingent liabilities as of December 31, 2017 amounted to Baht 599.9 billion, a decrease

of Baht 16.0 billion or 2.6 percent from the end of September 2017, with a decrease in ‘others’

(under other commitments) and other guarantees.

Compared with the end of December 2016, contingent liabilities declined by Baht 3.1

billion, due to decreases in other guarantees and letters of credit, while ‘others’ (under other

commitments) increased.

Sources and Utilization of Funds

The primary sources of funds as of December 31, 2017 were Baht 2,310.7 billion or 75.1

percent in deposits, Baht 401.7 billion or 13.1 percent in shareholders’equity attributable to the

Bank, Baht 133.6 billion or 4.3 percent in interbank and money market liabilities, and Baht 107.2

billion or 3.5 percent in debt issued and borrowings.

The utilization of funds comprised Baht 2,004.0 billion or 65.1 percent in loans, Baht 437.7

billion or 14.2 percent in interbank and money market assets, and Baht 593.2 billion or 19.3

percent in net investments (including net investments in associates).

Capital Reserves and Capital Adequacy Ratio

Consolidated Million Baht

Item

Capital Capital Adequacy Ratio

December

2017

September

2017

December

2016

December

2017

September

2017

December

2016

Total capital 419,580 423,958 403,068 18.17% 18.73% 18.32%

Tier 1 capital 383,942 383,797 360,818 16.63% 16.96% 16.40%

Common Equity Tier 1 capital 383,841 383,721 360,702 16.62% 16.96% 16.40%

The Bank Million Baht

Item

Capital Capital Adequacy Ratio

December

2017

September

2017

December

2016

December

2017

September

2017

December

2016

Total capital 404,226 408,506 388,788 18.03% 18.60% 18.17%

Tier 1 capital 369,261 369,305 347,373 16.47% 16.81% 16.23%

Common Equity Tier 1 capital 369,261 369,305 347,373 16.47% 16.81% 16.23%

8.000% 9.500%

12.000%

5.125% 6.625%

9.125%

5.750% 7.250%

9.750%

16.62% 16.63% 18.17%

16.40% 16.40%

18.32%

0

5

10

15

20

1 1 tConsolidated

BOT's requirements for 2020 BOT's requirements for 2017 BOT's requirements for 2016 As of December 31, 2017 As of December 31, 2016

Common Equity Tier 1 Capital

Adequacy Ratio

Tier 1 Capital Adequacy Ratio

Total Capital Adequacy Ratio

V3 22/02/61 10:09 น.

17

Under the principles of Basel III, the Bank of Thailand (BOT) requires commercial banks

registered in Thailand and members of their financial groups to maintain minimum levels of

capital adequacy as measured by three ratios, including the Common Equity Tier 1 ratio at no less

than 4.50 percent, the Tier 1 ratio at no less than 6.00 percent, and the total capital ratio at no less

than 8.50 percent – measured as a percentage of total risk-weighted assets. It also requires a

capital conservation buffer in addition to minimum capital adequacy ratios, phasing in an

additional capital ratio of more than 0.625 percent p.a. starting January 1, 2016 until completion of

the increment to more than 2.50 percent from January 1, 2019 onwards. To satisfy the minimum

levels and capital buffer specified by the BOT’s requirements, in 2017 the Bank is required to

maintain the Common Equity Tier 1 ratio at more than 5.75 percent, the Tier 1 ratio at more than

7.25 percent, and the total capital ratio at more than 9.75 percent – measured as percentages of

total risk-weighted assets. In September 2017, the BOT announced the guidelines for identifying

and regulating Domestic Systemically Important Banks (D-SIBs). Bangkok Bank, which is

classified as a D-SIB, is required by the BOT to hold additional capital for Higher Loss Absorbency

(HLA) by gradually increasing its additional capital ratio by an increment of 0.50 percent p.a. from

January 1, 2019 until completion of the increment to 1.00 percent from January 1, 2020 onwards.

As of December 31, 2017, legal capital funds were Baht 419.6 billion, Common Equity Tier 1

capital was Baht 383.8 billion, and Tier 1 capital was Baht 383.9 billion. The total capital adequacy

ratio was 18.17 percent, the Common Equity Tier 1 capital adequacy ratio was 16.62 percent, and

the Tier 1 capital adequacy ratio was 16.63 percent. With the inclusion of net profit from July to

December 2017, the total capital adequacy ratio, the Common Equity Tier 1 capital adequacy ratio and

the Tier 1 capital adequacy ratio would be 18.90 percent, 17.35 percent and 17.36 percent,

respectively.

Liquid Assets

Item December 2017 September 2017 December 2016

Liquid assets (Million Baht) 1,051,982 1,109,192 956,847

Liquid assets/total assets (%) 34.2 36.1 32.5

Liquid assets/deposits (%) 45.5 48.2 43.9

Liquid assets consisted of cash, interbank and money market items, claims on securities,

trading securities and available-for-sale securities. As of December 31, 2017, liquid assets totaled

Baht 1,052.0 billion, a decrease of Baht 57.2 billion or 5.2 percent from the end of September

2017, due mainly to a decrease of Baht 170.0 billion in interbank and money market items, while

available-for-sale securities rose by Baht 109.0 billion.

Compared with the end of December 2016, liquid assets rose by Baht 95.1 billion or 9.9

percent. Significant items included an increase of Baht 70.9 billion in available-for-sale securities

and an increase of Baht 43.1 billion in interbank and money market items.

8.000% 9.500%

12.000%

5.125% 6.625%

9.125%

5.750% 7.250%

9.750%

16.47% 16.47%

18.03%

16.23% 16.23%

18.17%

0

5

10

15

20

1 1 tThe Bank

BOT's requirements for 2020 BOT's requirements for 2017 BOT's requirements for 2016 As of December 31, 2017 As of December 31, 2016

Common Equity Tier 1 Capital

Adequacy Ratio

Tier 1 Capital Adequacy Ratio

Total Capital Adequacy Ratio

V3 22/02/61 10:09 น.

18

Credit Ratings

At the end of December 2017, credit-rating agencies maintained the Bank’s credit ratings

from the end September 2017 and the end of 2016. Details of the Bank’s credit ratings are as

follows:

Credit Rating Agency * December 31, 2017 September 30, 2017 December 31, 2016

Moody’s Investors Service

Long term - Deposits Baa1 Baa1 Baa1

Short term - Debt instruments / deposits P-2 / P-2 P-2 / P-2 P-2 / P-2

Senior unsecured debt instruments Baa1 Baa1 Baa1

Subordinated debt instruments Baa3 Baa3 Baa3

Outlook Stable Stable Stable

Financial strength (BCA) baa2 baa2 baa2

Financial strength outlook Stable Stable Stable

Standard & Poor’s

Long term - Debt instruments BBB+ BBB+ BBB+

- Deposits BBB+ BBB+ BBB+

Short term - Debt instruments / deposits A-2 / A-2 A-2 / A-2 A-2 / A-2

Senior unsecured debt instruments BBB+ BBB+ BBB+

Subordinated debt instruments BBB BBB BBB

Financial strength (SACP) bbb bbb bbb

Support +1 +1 +1

Outlook Stable Stable Stable

Fitch Ratings

International ratings

Long term - Debt instruments BBB+ BBB+ BBB+

Short term - Debt instruments F2 F2 F2

Senior unsecured debt instruments BBB+ BBB+ BBB+

Subordinated debt instruments BBB BBB BBB

Financial strength (Viability) bbb+ bbb+ bbb+

Support 2 2 2

Outlook Stable Stable Stable

National ratings

Long term - Debt instruments AA+(tha) AA+(tha) AA+(tha)

Short term - Debt instruments F1+(tha) F1+(tha) F1+(tha)

Subordinated debt instruments AA(tha) AA(tha) AA(tha)

Outlook Stable Stable Stable

* Long-term credit ratings classified as investment grade by Moody's Investors Service, Standard & Poor's and Fitch Ratings are Baa3,

BBB- and BBB-, or higher, respectively. Short-term credit ratings classified as investment grade by Moody's Investors Service,

Standard & Poor's and Fitch Ratings are P-3, A-3 and F3, or higher, respectively. .